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Question
Sammys Bakery and Presleys Sweetshop both sell cupcakes. The market price of one chocolate cupcake is $2.50. Sammys is willing to sell a cupcake for as little as $1.65; Presleys is willing to sell a cupcake for as little as $1.75. What is the total producer surplus for the two firms?
a. $0.75 d. $2.50
b. $1.60 e. $3.40
c. $0.85
Answer
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